Investing.com - Gold rose on Friday, advancing in the bullish $1,200 territory and notching its best weekly gain in six after disappointing U.S. nonfarm payrolls for September weighed on the dollar and prompted investors to seek alternative assets, including bullion and higher-yielding bonds.
Nonfarm payrolls rose by 134,000 last month, the Labor Department said, vs. expectations for a gain of 185,000. But the unemployment rate fell to 3.7%, the lowest in nearly 50 years.
"The NFP report is about as clear as mud for forex markets," TD Securities said in a note. "On the whole, we are not convinced that this is a catalyst to trigger additional U.S .dollar gains. If anything, it could be quite the opposite."
Gold futures for December delivery settled up 0.33%, or $4, at $1,205.60 a troy ounce on the COMEX metals division of the New York Mercantile Exchange, preliminary exchange data showed. The high of the day was $1,212.30, a peak since Aug. 26.
For the week, December gold jumped 1.2%, its best weekly gain since the week ended Aug. 19, Investing.com data showed.
Gold usually rises when the dollar declines, as it is denominated in the U.S. currency and is sensitive to moves in the greenback. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down by 0.06% to 95.37 by 2:16 PM ET (1816 GMT) after an intraday low at 95.18.
The yield on the benchmark United States 10-year Treasury, meanwhile, jumped to 3.227%, a level not seen since 2011, before leveling back to 3.208%.
Bond yields have surged since the Federal Reserve added a quarter point to bring U.S. interest rates to between 2% and 2.5% last week in the third rate hike of the year. The Fed inidcated another increase in December and Friday's jobs numbers were still supportive to the central bank's plans, analysts said.
Higher interest rates increase bond yields, making non-interest bearing gold less attractive to investors. They also tend to boost the dollar, making dollar-priced gold more expensive for holders of other currencies.
Despite that, gold has held its own against the dollar and Treasuries since last week, with traders saying it was a sign of the precious metal's return to its status as safe-haven reserve of the world.
Among other precious metals on COMEX, silver rose 0.55% to $14.67 per ounce, platinum rose 0.1 % to $825 and palladium increased 1.6% to $1,061.80 an ounce.
In base metals, copper lost 0.49% to $2.764 a pound.